Market expectations for a Federal Reserve rate increase strengthened on Friday after the latest U.S. inflation data came in above forecasts. Data released by the U.S. Bureau of Labor Statistics showed that core CPI rose 0.3% month over month in August, exceeding economists’ expectation of 0.2%. Following the release, market pricing indicated that the probability of a 25-basis-point rate hike at the Fed’s Sept. 15-16 meeting climbed to about 85%. Before the inflation report, that probability had been around 70%. The shift shows traders raising their bets on a near-term rate move after the stronger-than-expected core inflation reading.
Market bets on a Federal Reserve rate increase grew stronger on Friday after the latest U.S. CPI inflation data was released.
Data from the U.S. Bureau of Labor Statistics showed that U.S. core CPI rose 0.3% month over month in August, above economists’ expectation of 0.2%.
Current market pricing shows the probability of a 25-basis-point rate hike at the Fed’s Sept. 15-16 meeting has risen to about 85%, up from around 70% before the inflation data was published.
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